Paving the Way for Stronger Relations Between Europe and the Gulf

Collaboration between the European Union and the Gulf Cooperation Council is central to achieving global energy security, climate change, and sustainable development goals. ?Policy perspectives have evolved in both regions and focus more on circularity, carbon competitiveness, and clean industries.? Enhanced EU-GCC collaboration will enable both regions to strengthen their resilience and engagement globally.

It was a privilege to join the Med Regional Meeting “From the Gulf to Europe: Greening Energy Relations” co-hosted by KAPSARC and ISPI with the Italian Ministry of Foreign Affairs and International Cooperation on 10-11 September in Riyadh, and the EU-GCC Green Transition Forum hosted by the European Commission’s External Action Service and the United Arab Emirates Ministry of Energy and Infrastructure on 9 October in Abu Dhabi. Both events were organized shortly before the first EU-Gulf Cooperation Summit on 16 October in Brussels, and reflect on the steadily growing cooperation between both regions in which the International Energy Forum (IEF) also plays a role.

Focused on energy security and orderly and just transitions, the IEF bridges different and diverse producer-consumer country interests by sharing global energy market insight and data. Over the past years, the IEF helped to build stronger relations between Europe and the Gulf through various multi-stakeholder meetings to strengthen networks and uncover policy, market, and technology opportunities.

A high point was reached in February 2021 when both HRH Prince Abdulaziz bin Salman bin Abdulaziz, Minister of Energy of Saudi Arabia, and Frans Timmermans, Executive Vice-President for the European Green Deal of the European Commission joined the 5th IEF-EU Energy and Climate Day, alongside other key stakeholders. The event highlighted the renewed energy and climate solidarity apparent during the COVID-19 pandemic and resolved to work towards a sustainable and inclusive recovery by keeping energy access and climate goals within reach.?

From Superposition to Alignment ??

When the European Green Deal was launched in 2019, well-supplied energy markets and self-confidence in Europe’s climate leadership held regional producer-consumer relations in superposition—multiple states at the same time. Energy security, transition, and economic concerns at play on the global level draw EU and GCC relations into closer orbit along vectors that show more alignment today:

1.????? Clean industrial revivals and economic diversification to complement and balance reliance on overseas markets

2.????? Innovative and financial potential to future-proof economies with enhanced carbon competitive edge, boosting in-country value and jobs

3.????? Mutual reinforcement of joint investment and trade opportunities including adjacent economies in the Middle East, Africa, and South-East Asia

4.????? Energy security and transition synergies, which have become more obvious but remain poorly understood, because they are new or, at times, overlooked.

As governments and industries reassess and realign their energy and climate policies in a fundamentally changed and more volatile environment, energy and climate policies of the EU and GCC region have more in common now than before.

Europe targets 50 million tonnes of annual carbon dioxide injection capacity and production of 10 million tonnes of renewable hydrogen while importing a further 10 million tonnes by 2030.

This compares to around 60 million tonnes of Carbon Caputure and Utilization (CCUS) capacity installed in the Gulf region led by Saudi Arabia, the United Arab Emirates, and Qatar by 2030-2035, alongside successive strategic investments in large-scale clean hydrogen production in which NEOM, Saudi Aramco, and MASDAR lead.

These require strategic collaboration and offer new long-term trade and investment opportunities. Recently released reports on the Future of EU Competitiveness by Mario Draghi and the Renewable Hydrogen-Powered EU by Stef Blok of the EU Court of Auditors provide important reality checks. The next College of European Commissioners will no doubt take these on board as President Ursula von der Leyen sharpens focus on European competitiveness and a decarbonized and circular economy.

Though regulatory easing is not on offer, this may imply a shift in policy focus from clean electrons to clean molecules that will enable CCUS to play a greater role in Europe’s clean industrial revival by shaping cost-effective hydrogen value chains and trade opportunities and firming up demand anchors.

Clean electrons will continue to star in green transitions, but more clean molecules are urgently needed. Not only to achieve climate and sustainable development goals but to maintain market stability at affordable price levels, avoid cost escalations, and preempt network congestion or worse.?

Aligning sustainable financing criteria with circular carbon economy technologies and evolving carbon market and trade mechanisms will help create a more synergistic environment where investments in CCUS and Hydrogen are both financially attractive and more widely adopted. Using carbon intensity as the key metric rather than color coding will enable greater optionality and alignment of energy security and climate goals within and between both regions. Carbon management technologies like CCUS should not be treated in isolation but are integral to successful and cost-effective Hydrogen Renewables and other clean technology deployments.

In successive IEF meetings co-hosted with KAPSARC and the Clean Energy Ministerial, the IEF encouraged governments to greenlight CCUS by signing up to the Carbon Management Challenge and advance carbon management projects to reach gigaton scale by 2030 globally. This will assist energy consumption of heavy industry, including steel, chemicals, manufacturing, and cement as well as transport sector energy demand growth to become more sustainable and competitive.

Europe and the Gulf stand at the center of global energy security and transition policies and find economy-wide energy and climate policy approaches closer aligned. The importance of stronger EU-GCC collaboration to bring orderly and just transitions and sustainable growth to fruition globally, cannot be overstated.

*Foto credit: The Matter of Time (1994-2005), Weathering Steel, Dimensions variable, by Richard Serra (1938-2024), The Guggenheim Museum and Foundation, Bilbao Spain

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